Iata boss urges airport infrastructure boost

Istanbul, June 13, 2013

Major investments in airport infrastructure will be needed to meet the global demand for air connectivity which is growing at about five per cent annually, said the director general and CEO of Iata.

“Airports are airlines’ closest partners. Neither of us could exist without the other,” added Tony Tyler of the International Air Transport Association (Iata), calling for a unified agenda between airlines and airports to address the mutual challenges of growth and sustainability.

He was speaking at the Airports Council International (ACI) Europe / World Annual Congress and Exhibition in Istanbul.

Meeting these requirements efficiently will require close cooperation. Over the long term, airline profit margins have been insufficient to cover their cost of capital and this also has been the case for some airports.

“Neither partner can afford poorly-thought out and overly expensive infrastructure development. To avoid this, we must work together in a collaborative process based upon the basic principles laid down by the International Civil Aviation Organization (ICAO) which include consultation with airport users, transparency, non-discrimination, cost-based charges, and strict safeguards on pre-financing of future infrastructure,” said Tyler.

Tyler also cautioned that “decades of practical experience and longstanding and credible economic theory have shown that most airports have substantial market power.”

“Strong independent regulation is required to provide the cost discipline that otherwise would be imposed by the free market. And the ICAO principles offer sufficient flexibility for regulators to apply various levels of economic oversight where market forces do exist,” he added.

Tyler proposed a unified agenda and partnership between airlines and airports based on:

• A mutual understanding that long-term sustainability is an issue for both airlines and airports

• Recognition that the solution to our common challenges is not to take each other in an Anaconda-like grip to squeeze out every last penny from one another

• Working together to help airports find mutually beneficial efficiencies

• Seeking opportunities for cooperation to enable process improvements and new value added commercial opportunities such as through providing universal access to Wi-Fi

• Scoping out potential for joint business development.

“An agenda of cooperation does not mean that we will agree in every specific instance. But it does mean that we recognize we will achieve far more together than each could on our own,” said Tyler. – TradeArabia News Service